Leading global semiconductors specialist ST Microelectronics has announced its new strategic plan based on an elaborate strategic review started more than a year ago in response to the major changes seen in the dynamics of the wireless market.
Aligning the organisation with the new market environment, Carlo Bozotti, President and CEO of ST announced that they have decided to exit ST-Ericsson after a transition period. However, ST will continue to support ST-Ericsson as their supply chain partner, advanced process technology partner and application processor IP provider.
Describing the new strategy as centred on leadership in Sense & Power and Automotive Products, and in Embedded Processing Solutions, Bozotti said that ST’s specific focus would be on five product areas: MEMS and sensors, smart power, automotive products, microcontrollers, and application processors including digital consumer. These product families are expected to experience solid growth rates driven by secular trends and fit extremely well with market-leading positions and competitive advantages.
He added that the new ST would be more focused, leaner and better positioned to deliver value to customers and shareholders alike, aiming to rapidly achieve operating margins of 10%.
ST’s new strategy
The company’s new strategy is based on two product-segment organisations: Sense & Power and Automotive Products; and Embedded Processing Solutions.
ST will build on its leading position in Sense & Power, which includes MEMS and sensors, power discrete and advanced analogue products, while Automotive Products will cover from powertrain to safety, and from body to infotainment.
The Embedded Processing Solutions segment will have the company focus on the core of electronics systems rather than on wireless broadband access. This product segment includes microcontrollers, imaging products, digital consumer products, application processors and digital ASICs.
In line with the new financial model, the company expects both product segments to be profitable and generate cash. Embedded Processing Solutions, in particular will turn to profitability leveraging on a stronger product and technology focus, expanded customer base and manufacturing synergies between microcontrollers and digital products. ST will address an estimated $140 billion market in 2013 and has significant potential to grow and gain market share.
Bozotti believes that their new strategic plan will help ST grow faster, be more profitable and overall become an even stronger company.